Bank of America To Layoff 4,000 In LaSalle Bank Merger

LaSalle Bank customers won’t just see a name change at their local bank branches, Bank of America has announced plans to layoff 2,500 workers in Illinois and 1,500 in Michigan as part of the merger, according to Portfolio.

Buying LaSalle will make BofA (NYSE:BAC) a dominant player in Chicago for the first time. At present, BofA has less than 2 percent of that market’s deposits, according to the Federal Deposit Insurance Corp.

BofA has added 56 branches in Chicago in the past four years. With the LaSalle purchase, it will get 411 branches, 17,000 commercial-banking clients, 1.4 million retail customers and 1,500 ATMs in the Chicago area, Michigan and Indiana.

The deal also will mark BofA’s retail-branch entry in Michigan. BofA will have 264 offices there and be the state’s largest bank, with a 23 percent share of the market’s deposits. LaSalle also has six branches in Indiana.

The decision to lay off the workers got BofA immediate rebuke from U.S. Sens. Dick Durbin and Barack Obama, both Illinois Democrats. The pair on Monday sent a letter to Kenneth Lewis, chair of Bank of America’s board, in which they urged Lewis “to reconsider the scope and timing of these layoffs.”

From a consumer’s perspective, does this bother you? Or is one bank/banker just as good as another?

“…a high percentage of the layoffs will be in contacted positions, such as security. LaSalle has it’s own security team to handle all of their banks, while BoA contracts out. That contract will then need to be applied, but many of those security guards will be sought after to retain their same roles during the transition, though rehired by various contractors. While they have been “laid off” they will be retaining similar roles and responsibilities.”

Said little bird also provides an internal B of A memo about the transition:

Bank of America is on track to close on the LaSalle Bank transaction in the first week of October, when it recognizes “Legal Day One.” On that day, Bank of America and LaSalle Bank will operate as a single legal entity.

Even after Legal Day One, the transition team will continue its assessment of ongoing operations to determine how best to integrate the two companies and provide maximum value to associates, clients and customers, and shareholders.

When the purchase was first announced, Bank of America said that it expected $800 million in after-tax cost savings in this transaction. The company has noted since then that the cost savings will involve layoffs. The transition team’s current projection is that there will be approximately 1,500 layoffs in Michigan and 2,500 layoffs in Illinois. These reductions will occur over the next two years.

The company will strive to find new opportunities within the bank for associates who are affected by these changes. Affected associates will be provided career support resources, extended benefits and severance pay.

“Layoffs and consolidations are never easy but we felt it was important to communicate with associates immediately when this information was available,” noted Jim Eckerle, Transition executive for Bank of America. “As is always the case, we will work closely with affected associates and communities to minimize the impact of these changes.”

Specific affected positions have not been identified; nor have individual affected locations. Additional details to this preliminary assessment will be provided later in the assessment.

Apart from LaSalle sponsoring a lot of cultural/athletic events and activities around Chicago, I don’t know a lot about them. But that’s a LOT of jobs lost, and I doubt that BofA will be as invested in the community as LaSalle was.

La Salle is a bank with a good reputation and is considered to be an excellent corporate citizen in the region. Previous out-of-town owners of the bank always realized that the La Salle name meant something in Chicago and therefore always kept it, and the bank’s quality intact. The B of A branches that have been previously opened under the B of A brand in Illinois have not done well, so of course they are buying a quality product to kill the competition, are kicking the name to the curb and renaming La Salle as Bank of America. They think they have a captive audience, I guess. Well, guess what, they don’t. Now, this will not create a backlash at anywhere near the level of a Macy’s/Marshall Fields fiasco but I think B of A is going to be rather surprised at how many long-time La Salle customers take their business elsewhere.

Ack! I was so hoping that merger wouldn’t go through — Now I have to change banks. Maybe I can do it today…!

I suggest that others do too, IMMEDIATELY if you’re going to suddenly become a BofA victim/customer. I work in finance and they’re a NIGHTMARE to their customers, whether it’s in banking, credit cards, mortgages…they’re just the worst. It’s gotten so that if people tell us they’re having a problem with BofA, we tell them to call a lawyer, ASAP. BofA will do everything they can to screw you, period. They’re one of the most predatory major corporations I’ve ever seen.

This is just like when they bought Fleet. Boston screamed bloody murder, and BofA placated them with hollow promises, and slowly sucked all the jobs away to Charlotte and Richmond. The merger will go like crap, LaSalle account holders will get lost in the shuffle, and they’ll lose a ton of market share just like they did in the Northeast.

Anyone know what’s a good bank to switch to in the chicago region? Bank of America is a horror story I just wish to avoid, and I can’t stand Washington Mutual either. Ugh. What happened to the days when you met the banker and he had to work for your trust? Oh yeah. It died with corporate imperialism.

Seriously – anyone have any recommendations on a good bank in Chicago/Hinsdale area?

I really can’t stand WaMu. They’re insanely stupid. They put a week hold on a check from FedEx, and when I tried to talked to the branch manager and tell her it was a check from FedEx and it’s good, she said “you’d be surprised.” I hate places that play games. I used US Bank when I was in Colorado, and they never gave me problems. Hell, I raped them on their old 5 star guarantee (if you waited in line more than 5 minutes, they’d just credit u $5).

I liked LaSalle – if I deposit a check, it would be clear in a day. I just want a bank that doesnt play games, ya know?

I might check out Harris bank. There’s some really local banks in the city I live in (Hinsdale). Ugh. I just switched all my stuff to La Salle.

@AndyGoodwin: Living in Chicago and having worked in banking previously, Chase (whom I currently use – yes, I know their rep here but I’ve not had any problems in 2+ yrs.), US Bank, and Harris are all pretty good. If you don’t mind a smaller bank, West Suburban is really good, they have a lot of locations in the burbs (full disclosure: I did work for them yrs ago). Also heard good things about Hinsdale B&T and First National.

Avoid 5/3, Wamu, and the one that’s almost exclusively only in Jewel-Oscos (name escapes me currently).

@FLConsumer: it’s quite probable, but currently legally impossible. there’s a regulation that states that a single bank cannot hold more than 10% of the nation’s deposits – bank of america is frighteningly close to that number (around $700 billion). boa was lobbying to have the cap removed, but i think they’ve given up on that for now.

eventually, i think we’ll see boa start spinning off divisions – most of their profit over the past 6 years has been thru acquisitions. when that gravy train stops, they’re gonna be facing some pissed off shareholders.

I like ETRADE but they only have like 50 branches around the COUNTRY, so you need another brick and mortar bank. And as soon as my ETRADE debit card comes in the mail, my Chase account will become nothing but a portal thru which I’ll funnel my money to E*TRADE….damn I need to read up on their transfer fees. Oh wait, they gave me 10 free checks, that’s what I’ll use those for.